Heath 1970-74

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Heath's economy 1970-74

  • Initial aim: 'free market' policies with cuts in public spending.
  • Anthony Barber initial policies: tax cuts and credit and hire purchase restrictions to control money supply.
  • Inconsistent - complemented by rates and fuel rebates for poor families.
  • 1973-1975: recession - instability in Middle East.
  • October 1973 Yom Kippur War: oil supply was reduced.
  • Cost of fuel rocketed (up to 400% at its peak).
  • National incomes policy - 2% fall in Britain's national output and increased inflation.
  • U-Turns: nationalisation of Rolls Royce (1971) and financial aid to Upper Clyde Shipbuilders.
  • 1973 - balance of payments deficit over £900 million.
  • Unemployment rose to 1 million.
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Industrial Relations under Heath.

  • Initial aim: to bring trade unions to heel with his own initiatives as part of a 'free market'.
  • Excessive pay demands.
  • Rising inflation.
  • Industrial Relations Act (1971) - ignored by employers and TU's.
  • 1971: more days lost through strikes in any year since General Strike of 1926.
  • Unemployment up to 1 million.
  • Winter of 1973-74: NUM organised overtime ban and further strikes in protest at Heath's attempts to curb wage demands.
  • Jan-March 1974: 'Three Day Week'.
  • 'Who Governs Britain?' - Feb 1974 election.
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Heath: the EEC

  • New Year's Day 1973: Heath formally signed Britain's entry.
  • Membership had been rejected twice before by French President De Gaulle.
  • Heath believed membership would tackle 'stop-go' economics of recent years under both major parties.
  • 1974: Enoch Powell (Conservative dissident) - urged people to vote Labour due to their opposition to EEC membership.
  • Impacts: no real change in economy & Britain had to contribute more as a powerful country and so got little out.
  • 'Most significant achievement'.
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Heath's leadership

  • 'Selsdon Man'
  • New type of Conservative - appealed to lower middle-classes.
  • Majority of 30.
  • First democratically selected leader.
  • BUT U-Turns made him appear the same as previous leaders.
  • Hobbies included yachting and listening to classical music.
  • Attended Oxford - still perceived as upper class/aloof?
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